The financial impact of the Coronavirus Pandemic on the United States Healthcare System has had a lasting impact which will reach far into 2021 for many hospitals. We’ve just recently seen claims denial rates jump to a staggering 23% in 2020, but there’s a bit of good news for those working to recoup lost funds. Thanks to two loopholes, for the first time in history, hospitals can reach back in time for claims denied through ERISA Appeals, essentially stopping the clock on late claims made back to March 2020.
DOL Joint Notices Extends Deadlines for Filing Claims Retroactive to March 2020
In an effort to curb denials of valid claims benefits and other claims that could inadvertently be denied due to the COVID-19 pandemic, the department of Labor and Treasury released two joint notices which extend the deadline for filing claims during the “outbreak” period. From March 1, 2020 through 60 days (about 2 months) after the official announcement of the end of the pandemic OR 1 year from the date an individual was first eligible, hospitals will be granted extra time for required disclosures and notices.
According to Complex Claims, the two relief notices offer protective deadline extensions in the following circumstances:
- Enrollment deadlines: Extends the dates during which participants and beneficiaries can enroll in group health plans.
- Timely filing deadlines: Extends the dates within which participants, beneficiaries, or providers are required to file benefit claims under plan claim procedures.
- COBRA continuation of coverage deadlines: Extends the coverage deadlines for COBRA continuation.
- COBRA premium payment deadlines: Extends the period in which participants can make premium payments.
- Appeal deadlines: Extends the dates during which claimants may file an appeal for adverse benefit determinations under plan procedures.
- ERISA external review appeal deadlines: Extends the dates that limit the time claimants have to file information to perfect a request for external review following an incomplete initial request.
How Much Can Your Hospital Expect to Recoup?
According to Change Healthcare, 2020 Claim Denials increased 23% compared to 2016, with a jump of 11% following the onset of COVID-19. While claims denied due to timing issues is only a small percentage, it all adds up quickly. According to Change, a typical health system loses 3.3% of net patient revenue due to claim denials equating to, on average, $4.9M annually per hospital. The good news is that 86% of these claim denials are avoidable, with 26.6% of claims denied due to registration/eligibility, and 17.2% of claims denied due to missing or invalid data.
So, the question is, how much can you recoup? Well, if we were to only look at the ERISA Timing Appeals as an example, and let’s say this conservatively represents just 2% of denial claims during COVID-19, the average hospital could expect to recoup as much as $98K for late claims alone. Add this to the 84% of other avoidable claim denials, and hospitals could expect to gain as much as $4.1M per year due to recovered lost claims.
Where should hospitals and health systems invest these recovered claim funds?
According to AAFP, “for every 15 denials a practice prevents each month, it not only receives reimbursement sooner, but also saves $4,500 per year on costs associated with correcting those claims. In the world of decreasing reimbursement rates, this potential for cost savings and improved cash flow can dramatically improve a practice's financial health in a relatively short time.”
It is natural to look at the root causes for claim denials mentioned earlier, and specifically at the #2 cause for denial claims, Missing or Invalid Claim Data. Access eSignature has been the all-in-one eSignature and eForms platform for hospitals for over 20 years. Our integrated eConsent and eSignature platform allows hospitals to completely control their healthcare forms, from patient and clinician eConsents and eSignature for any department, to back-office forms as well. Access is the only purpose-built patient electronic signature platform for hospitals that seamlessly integrates with your EHR and that has all the capabilities to meet ALL its eSignature needs. If you are looking to consolidate multiple patient e-Signature vendors, expand your paperless initiatives to bed-side Informed Consents, or extend patient electronic signature capabilities to patients outside of your hospital as part of a contactless check-in initiative, we can help.
Access eForms has over 20 years of hospital specific eSignature experience across Epic, Cerner, and MEDITECH systems. If we can be of any help as you pursue, plan for, or consider an eSignature solution, please do not hesitate to reach out. It is our pleasure to help hospitals achieve their goals and provide the superior care that their respective communities deserve.
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